In the News

Georgiou and Highveld Syndications talk about a settlement

Ryk van Niekerk | 20 May 2016

Property mogul Nic Georgiou and the executive of the Highveld Syndication Action Group (HSAG) have started informal discussions regarding a potential settlement that would avert a drawn-out class action lawsuit.

The first meeting was held in April in Mossel Bay, but no official proposal emerged.

It has also become apparent that Elna Visagie and Herman Lombaard, two of the most hardworking and passionate advocates against Orthotouch and Georgiou in recent years, are now working for Orthotouch, apparently for monthly salaries as high as R100 000.

From various communications with Visagie and Lombaard it is evident that they are also trying to facilitate a settlement as they are concerned that a drawn-out lawsuit would not be in the best interest of investors.

Informal discussions

Helgard Hancke, one of the representatives of HSAG, confirmed that Georgiou attended the Mossel Bay meeting without legal representation.

Jacques Theron of Theron and Partners, the legal firm driving the class action, who was also present during this meeting, said another meeting is scheduled for next week.

Both however emphasised that the negotiations are at a very early stage.

Georgiou’s response

Georgiou refused to comment on these developments, citing Moneyweb’s apparent bias against the company. “Due to the fact that your reporting has consistently been biased against us, we have long since taken the view that anything we comment on will only be used or abused in an endeavor to cause us damage.”

Visagie and Lombaard’s employment by Orthotouch has raised eyebrows. Hancke posted the following late on Thursday night on the HSAG Facebook page:

Further to my correspondence re the settlement negotiations, we are of the opinion that there is still an urgent matter that must be addressed in lieu of all the parties concerned and the uncertainty amongst investors.

Based on all the enquiries we receive it seems that there is quite some controversy regarding the roles of Elna Visagie and Herman Lombaard and whether they are still involved in the class action activities as in the past.
It is absolutely necessary and of utmost importance towards investors that there is no illusion towards the role that every participant plays in this ongoing saga to recover our money. We consider R 4,6 billion to be a very serious matter and not child’s play because it is hard earned retirement money, invested in the syndications, which are now at stake and affect the lives of elderly people.In view of transparency I during the first round of negotiations and again yesterday asked Nick Georgiou where do they fit in and he clearly answered and I quote: “You can tell the people that Elna & Herman now work for me and their tasks are to promote the Capital Growth Fund which will be listed in the near future.”This is the option 3 in terms of the 155 scheme of arrangements that investors could choose.Georgiou also indicated that Elna & Herman can no longer be part of or promote the class action because of their agreement with him which makes sense.
It is therefore very simple. They cannot on the one hand work for Orthotouch which is one of the respondents in our court case and on the other hand promote the class action against Orthotouch. It is a conflict of interest and surely not on par with their contractual obligations towards Georgiou.
They choose Orthotouch so be it and can therefore not advise class action investors unbiased.
It is therefore also clear that the letter published on our website (www.hsaction.co.za) by attorney Theron was not a ridicules letter (Herman Lombaard) after all but actually the truth and the allegations against our attorney were absolutely uncalled for and not correct.
I therefor request that we consider, also in the interest of Herman & Elna, this matter now as water under the bridge and something of the past.
Let’s close this chapter and wish Elna & Herman all the best with their lives and duties at Orthotouch.
We will however still concentrate on the purpose of the class action to protect the interest of investors and claim our money back.
You are now aware of the true facts as disclosed in person to us by Nick Georgiou.
Our legal team also confirmed that Elna or Herman are not part of the class action anymore since they joined forces with the opposition.
As always – Together we will win. Regards Helgard Hancke

Prior to the publication of this statement, Visagie confirmed to Moneyweb that Georgiou approached her last year and that she started her employment as a communications representative in November at a monthly salary of R100 000.

Visagie said she is working with Georgiou to facilitate a settlement as the legal process would be drawn out and not in the interest of all the investors. “It may take many years before the court rules on the class action and during this time many elderly, suffering and sick investors may die without receiving their rightful income.”

Visagie said she uses part of the R100 000 salary to assist poor and suffering investors.

Lombaard neither confirmed nor denied his Orthotouch employment. He did however say that he is fighting for investors and that he and Visagie are working hard to facilitate a settlement.

Lombaard also posted several messages on social media platforms that echoed his commitment towards investors.

Class action

The HSAG has secured the support of more than 12 000 of the 23 000 investors for a class action suit against Orthotouch and Georgiou to recover their investments.

The process started in 2011 when Orthotouch bought the properties from the failed Highveld Syndication companies and undertook to repay investors over a period of five years.

However, Orthotouch defaulted on these repayments as it was not financially viable and proposed a scheme of arrangement as an alternative to the liquidation of the company.

The scheme of arrangement was sanctioned in November 2014, but HSAG has applied to the South Gauteng High Court to have it set aside.

The class action suit is dependent on the court setting aside this scheme of arrangement.